Light short-covering in corn and beans overnight... Corn futures are fractionally higher amid some light short-covering at week’s end. Soybean futures are up 2 to 3 cents thanks to some similar action. SRW wheat is around a penny higher, HRW wheat is around a penny lower, and trade is limited in the spring wheat market. The U.S. dollar index is down slightly while crude oil futures are marginally higher.
WOTUS repeal news may come today... The Environmental Protection Agency’s formal repeal of the Waters of the U.S. (WOTUS) rule released under the Obama administration could come as soon as today. The proposed rule and guidance have been undergoing White House review since May. A court battle will likely result.
China remains an aggressive buyer of soybeans... China imported nearly 9.587 MMT of soybeans last month, a 25.1% boost from year-ago, with Brazil accounting for 82.8% of that total. But thanks to a slow start to Brazil’s export season, the U.S. was able to ship China more than 1.470 MMT of soybeans last month, a 166.2% surge from year-ago. Five months into the year, China’s imports of soybeans stand at roughly 37.121 MMT, which is up 19.8% from last year at this point.
China ups wheat buys amid slack corn purchases... China imported just 42,219 MT of corn in May, a 95.9% plunge from last year, with Ukraine supplying more than half the total. So far this marketing year, China has brought in 352,159 MT of corn, also down sharply (87.6%) from year-ago. In contrast, Beijing has upped its wheat purchases, bringing in 502,757 MT of the grain in May, with the U.S. as its top supplier. So far this marketing year, China’s wheat imports stand at more than 2.175 MMT, up 67.6% from last year. Australia and the U.S. have been its top suppliers.
China ramps up ethanol exports... China exported 16,304 cubic meters of ethanol during May, a 15 times more than what it shipped in May 2016, according to customs data. The country has rolled out a series of measures meant to boost processors’ consumption of its aging corn stockpiles. For the first five months of the year, China’s ethanol shipments stand at 59,000 cubic meters, levels not seen since 2010. The boost in Chinese production plus restrictive tariffs on ethanol imports that were put in place at the end of 2016 have choked off U.S. shipments of ethanol to Beijing.
Results of latest Chinese corn auction... China sold more than 1.171 MMT of 2013-crop corn from its state reserves at an auction today, which represented 50.1% of the total supplies offered. The sales took place at an average price of 1,347 yuan ($196.97) per metric ton.
Argy ag ministry ups corn crop peg, cuts soybean crop... The Argentine ag ministry cuts its 2016-17 soybean crop estimate by 1 MMT to 57 MMT yesterday, citing a reduction in harvested area. On the other hand, the ministry raised its corn crop estimate by 1 MMT to 47.5 MMT. The ministry also trimmed its 2017-18 wheat planted area projection by 100,000 hectares to 5.9 million hectares.
French wheat crop ratings drop amid dry weather... French soft wheat crop ratings plunged the week ending June 19 to 68% good to excellent, down six points from week-ago, according to FranceAgriMer. This signals dry conditions were having a big impact on the crop, even before a heatwave set in this week. More declines are likely ahead. The French farm office also lowered its corn crop rating by 2 percentage points to 84% good to excellent.
USDA suspends fresh beef imports from Brazil on safety concerns... The move came after Brazil earlier suspended beef exports from five slaughterhouses to the U.S., after a foot-and-mouth disease vaccine potentially caused abscesses in some cattle. USDA said the block on Brazilian beef would remain in place until Brazil’s agricultural ministry “takes corrective action which the USDA finds satisfactory.” Since USDA’s FSIS has been scrutinizing all Brazilian meat shipments to the U.S. since March, officials have rejected about 11% of Brazilian fresh beef products — a rate far above the 1% rejected from other fresh beef exporting nations. About 1.9 million pounds of Brazilian beef were turned away due to public health concerns, sanitary conditions, and animal health issues since then.
COF report expected to show all major categories up from year-ago... Traders expect USDA to report there were around 11.060 million head of cattle on feed as of June 1, which would be up 2.4% from year-ago levels. Placements and marketings are also expected to be up 10.4% and 8.5%, respectively, from year-ago levels. We will have full coverage of the Cattle on Feed (COF) report in “Evening Report” and online.
Packers bringing in big profits as cash prices tumble... Packer profit margins climbed above $212 per head yesterday, keeping demand for animals solid. But supplies are also readily available in most regions. As a result, packers were able to purchase cattle at sharply lower prices this week. Some additional trade took place around $119 to $120 yesterday. The ongoing slide in futures signals traders believe more dramatic declines are ahead for the cash market. On a more positive note, yesterday’s Cold Storage Report showed frozen beef stocks at the end of May were a bit lighter than expected.
Cash hog market gives signs of topping... Cash hog bids have been mixed this week, hinting that a seasonal top may be near. This has given traders incentive to book some profits, though nearby contracts are trading at a discount to the cash index. After slipping Tuesday and Wednesday, cash bids turned higher again on Thursday.
Overnight demand news... Egypt bought 120,000 MT of wheat from Romania and 55,000 MT of wheat from Ukraine.
Today’s reports:
- 8:00 am Food Price Outlook -- ERS
- 2:00 p.m., Cattle on Feed -- NASS
- 2:00 p.m., Chickens and Eggs -- NASS
